As previously suggested, you will be approaching the idea of setting up your e-commerce website from one of several different positions. The work that you have to put into finding suitable sources of products that you want to supply to customers will to a large extent depend upon your background.

Follow up:

For example, you may already have a business that operates in the real 'bricks and mortar' world, and your move into e-commerce is an extension of your existing business rather than a completely new venture. In this scenario, you probably already have suitable suppliers for the products that you want to start selling online.

In a similar manner, if you are coming from a particular occupation and you plan to use your previous knowledge and experience as the basis of your e-commerce business, then you probably already have suitable suppliers that you can source products from.

The third possibility is that your new e-commerce venture is a 'green field' opportunity, something that you have never been involved in previously but want to be involved in from now on.

If you boil down these three different options, you have two possible sourcing situations. You either know where you can get the products that you want to supply from your e-commerce site, or you don't.

Let us consider each of these in turn.

The first of these situations would at first glance appear to be very straightforward. If you already know where you can source the products that you want to supply to your customers via your e-commerce website, then that would appear to be 'job done', but is it?

While you are dealing with your local neighborhood or city, you are working within an environment where prices across the region do not tend to vary very much. If you buy a pizza from a fast-food store on one side of your city, the price is not going to be very different to that in a similar fast-food place on the opposite side of town.

Consequently, anyone who is a product supplier in that region is going to base the price of his products on what is acceptable to the retailer, who bases their judgment on what the customer will pay.

You can see this any time a new supplier moves into an area where they have not previously operated, and seriously undercuts existing suppliers. A percentage of businesses will switch to that new supplier, because they are trying to carve themselves a niche in the market based on price.

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